Sun. Aug 14th, 2022

Singapore has set crypto derivatives trading in its sights. Regulators in the Southeast Asian city state are looking to add crypto derivatives trading in leading cryptocurrencies such as BTC and ETH to approved local exchanges. The Monetary Authority of Singapore has proposed regulating crypto derivatives trading activity under the Security and Futures Act on the following approved trading platforms:

  • Asia Pacific Exchange
  • ICE Futures Singapore
  • Singapore Exchange Derivatives Trading Limited
  • Singapore Exchange Securities Trading Limited

The move is in response to an uptick in demand by institutional investors including hedge funds and money managers who are increasingly looking for ways to hedge their exposure to the volatile asset class. On the other hand, the MAS is quick to warn about the risks associated with crypto derivatives trading for retail investors as a result of the “high price volatility.” The regulator is looking to tack on a 50% margin requirement for individual investors, going so far as to say:

“Payment tokens and their derivatives are, however, not suitable for most retail investors.”

Source: Bloomberg

Singapore couldn’t have picked a better time to join the crypto derivatives party, with the market growing increasingly crowded as more exchanges jump into the fray. And it gives big investors another way to trade volatile cryptocurrencies on a regulated platform, which in addition to the custody of assets has been a major hurdle for them. According to data cited by Bloomberg, between USD 5 billion and USD 10 billion in BTC futures is trading daily, which surpasses spot-trading volume by as much as 18 times on the high end.

Source: Twitter

Major players such as the CME and Bakkt, not to mention Binance, already support crypto futures trading. The CME plans to introduce BTC options trading in January 2020. Bakkt, which launched in September, has been slow to gain traction, but its trading volume has been setting new internal records on a constant basis, most recently hitting a new high of more than 1,750 BTC futures contracts traded, worth more than USD 15.5 million. This is a far cry from Bakkt’s October performance, when daily trading volume hovered at below USD 2 million. Meanwhile, the CME’s bitcoin futures trading volume has reportedly taken a recent hit, which suggests that institutional investors are spreading their capital on multiple trading platforms.

Bloomberg reports that the ICE Futures Singapore is targeting next month to launch “cash settled futures” contracts. It’s unclear when SGX and APEX will jump on the crypto derivatives bandwagon.

Source: Twitter

Singapore isn’t late to the crypto derivatives party but it isn’t a first-mover, either.

Singapore Is Becoming a Blockchain Hub

The global blockchain industry is poised to grow at a CAR of nearly 75% in the six-year period leading up to 2023, fueled largely by the Asia-Pacific region, according to Genesis Marketing Insights. Approximately three-quarters of Singaporean executives are exploring the integration of blockchain technology into their businesses, with more than 10% of them having added it already, as per PwC research.

Source: Twitter

Singapore has become a safe haven of sorts for investors given its friendly approach to taxation, which includes zero capital gains tax.


By Dov Herman

Dov is a Blockchain and Forex trading enthusiast, who spends most of his time trading and examining software who are related to cryptocurrencies and forex trading. You can follow on Dov’s reviews and articles here on TrustedBrokerz and across the web.